Retail pharmacy can rest easy with unequivocal AMP victory

ALEXANDRIA, Va. — It’s a battle that raged for more than three years. But in mid-December, the retail pharmacy industry was able to declare a clear, unequivocal victory.

We’re talking, of course, about the struggle to head off what would have been a devastating change in the way Medicaid pays community pharmacies to dispense generic drugs to low-income patients. On Dec. 14, the chain and independent pharmacy lobbies announced they had reached a landmark agreement with the Centers for Medicare and Medicaid Services that effectively ends the threat.

In short, the National Association of Chain Drug Stores and the National Community Pharmacists Association refer to the proposed changes as AMP, which stands for average manufacturer price. CMS had proposed AMP as a new method for calculating the market price of generics as a new basis for establishing the federal upper limit of reimbursements to pharmacies for dispensing those generics to Medicaid patients.

CMS unveiled the new reimbursement guidelines as a way to cut Medicaid costs in line with the Deficit Reduction Act of 2006. But pharmacy leaders have long argued that it’s a flawed approach to cost-saving by the government. AMP doesn’t reflect the true acquisition cost of the generic for retail pharmacies, they argued, since it takes into account the lower costs paid by other types of purchasing entities, such as hospitals and institutions. What’s more, the feds’ definition of a multiple-source drug itself was flawed, pharmacy advocates asserted.

Together with the low rate of markups CMS was proposing for generic Medicaid payments, the new AMP rule drastically would have cut pharmacy reimbursements and made it all but impossible to dispense medicines to low-income patients without incurring a loss, pharmacy leaders have long argued. To head off the change, NACDS and NCPA filed a suit in federal district court in 2007 to halt the new AMP guidelines from taking effect.

The resulting court-imposed injunction has kept AMP from taking effect, and it has saved chain and independent pharmacies an estimated total of $5.5 million a day ever since. Now that CMS finally agreed to withdraw its reimbursement plan and go back to the drawing board, NACDS and NCPA, along with their members, are breathing a sigh of relief. The fact that they’ve also agreed to drop the suit signals the end of a long — and ultimately victorious — battle for respect, and a decent return on their business.

Small-town service forms pharmacy familiarity for Fruth customers

POINT PLEASANT, W.Va. — A customer visiting any of Fruth Pharmacy’s 25 stores in West Virginia and southern Ohio will find many of the same products and services one would find at any national chain pharmacy; but on top of that, the chain offers a highly personal approach to retailing. “

The thing that sets Fruth apart is excellent customer service,” Fruth Pharmacy president Lynne Fruth told Drug Store News. “It’s kind of a mix of the best of what the bigger chains can provide with that small-hometown service.”

Stores have employees — including pharmacists and cashiers — who have worked there for 20 years or more, which creates a sense of familiarity for customers. The chain, which has around $135 million in sales per year, also pays special attention to the customers, offering such services as home delivery and having employees who go the extra mile for customers by helping them carry purchased items to their cars. In June, Fruth offered happy birthday wishes to customer Dorothy Shamblin of Nitro, W.Va., for her 100th birthday.

Travel clinics, immunizations take flight at Bartell Drugs

Bartell, which had an estimated $353.4 million in sales in 2009, began operating travel clinics eight years ago and now has them at 10 of its 59 stores. They were the brainchild of pharmacists Jolene Kalmbach and Sharon Woodward, who got the idea after noticing that patients’ doctors often lacked necessary expertise in travel medicine and that commercial travel clinics were overbooked.

Customers can pay $50 for a consultation with the pharmacist and then pay individually for immunizations. In particular, Bartell’s clinics benefit from a provision in Washington state’s pharmacy regulations that gives pharmacists limited power to prescribe medicines and vaccines under special agreements with physicians.

“Seattle has emerged as a business-and-leisure travel hub to Asia, Latin America and Europe,” said Bartell Drugs clinical care coordinator Rachel Allen. “The international travel clinics have become a signature service that not only supports awareness of our overall vaccination program but [also supports] sales of travel-related items throughout the entire store.”

As part of a panel at the recent Drug Store News Industry Issues Summit, officials from Walmart and Kroger shared the ways the two organizations go about taking a collaborative approach to health care.

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